Budget Outlook and Reviews at theUniversity of Illinois at Chicago

Bringing Administrators Together Conference Office of Provost Michael Tanner

April 15, 2010

Illinois State Tax AppropriationChanges by Agency

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

FY90FY91

FY92FY93

FY94FY95

FY96FY97

FY98FY99

FY00FY01

FY02FY03

FY04FY05

FY06FY07

FY08FY09

FY10

Human ServicesElem/Sec

Higher Educ

All Other

State Average

66.6%

39.8%

-24.9%

-4.0%

61.1%

In Constant 2009 Dollars (CPI)

FY02 to FY10 exclude $45 million in payments to CMS from Universities for Health Insurance

Health Insurance moved from CMS (included in all other) to Human Services in FY06 and adjusted back to FY04

Source: Illinois State Budgets.

-40%

0%

40%

80%

120%

160%

200%

240%

280%

320%

360%

FY90FY91

FY92FY93

FY94FY95

FY96FY97

FY98FY99

FY00FY01

FY02FY03

FY04FY05

FY06FY07

FY08FY09

FY10

ISAC

SURS

Community Colleges

Universities -23.1%

-19.5%

25.0%

334.3%

In Constant 2009 Dollars (CPI)

Due to the changes in SURS funding from General Funds to State Pension Fund (SPF) in FY05, SURS funding includes the SPF in FY05-FY09 and Pension Obligation Bonds in FY10. FY02 to FY10 exclude $45 million payment to CMS from Universities for Health Insurance. FY10 ISAC includes supplemental appropriation.

Source: IBHE FY10 Budget as signed by the Governor. Inflation assumptions 2.5% for FY10.

Cumulative Change in State Tax Appropriation by Higher Education Sector

State of Illinois – General Revenue FundEstimated Accumulated Unpaid Vouchers

Dollars in BillionsTOTAL ACCOUNTS PAYABLE

At end of fiscal year

Projected unpaid vouchers

Contributions owed to state pension systems

Payment on FY 2010 pension borrowing

Loss of one-time federal stimulus aid

Miscellaneous revenue losses/sweeps

$6 billion

$4.1 billion

$0.8 billion

$1.5 billion

$350 million

PROJECTED FY 2011 REVENUE SHORTFALL APPROACHES

$13 billion

nearly

FY 2010: Nearly $6 billion (projected)

Source: Chicago Tribune

The State’s FY 2011 Budget Hole(in Millions of Dollars)

Source Amount

Loss of one-time revenues used for FY 2010 $5,254

Pension note proceeds $3,466

Federal stimulus $1,436

Fund sweeps $352

1st year repay of pension notes $800

Estimated pension increase $531

Carry-forward of FY 2010 budget gap $5,670

TOTAL $12,255

Source: Commission on Government Forecasting & Accountability

FY 2002 was the high water mark for State support (GRF) in absolute dollar terms.State support (GRF) was 48% of the total revenue in FY 1990, 30% in FY 2002, and fell to 16% by FY 2010.The significant growth in self-supporting activity is primarily patient care (Hospital, clinics, and practice plans); and secondarily Auxiliary activity.

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ions

Fiscal Year

University of Illinois at ChicagoRevenue by Fund

Self-Supporting

Institutional Funds

Grants & Contracts

Gifts & Endowment

Income Fund

GRF

FY 2002

Revenue

FY 2010

Revenue

UIC State and Institutional Funds Budget

UIC’s state & institutional budget went up due to tuition increases and ICR growth

$498.4M

Income Fund $93.9M

Royalties $3.5M

ICR $47.9M

Admin Allowance $9.4M

GRF $343.7M

$626.3M

ICR $60.4M

Admin Al lowance $20.1MRoyalties $6.5M

Income Fund $250.3M

GRF $285.7M

FY 2002

Revenue

FY 2010

Revenue

UIC State and Institutional Funds Budget(Constant Dollars)

Adjusted for inflation, UIC’s state & institutional budget decreased as compared to FY 2002

$498.4M

Income Fund $93.9M

Royalties $3.5M

ICR $47.9M

Admin Allowance $9.4M

GRF $343.7M

$461.1M

ICR $44.4MAdmin Allowance $14.8M

Royalties $4.7M

Income Fund $184.3M

GRF $210.4M

$0

$100

$200

$300

$400

$500

$600

July06

Dec06

June07

Dec07

June08

Dec08

June09

Dec09

June10

UI Month End GRF ReceivableFiscal Year 2007 through Fiscal Year 2010In Millions

Month End General Revenue Fund Receivable

* *

* The first two months of FY10 have receivables from FY09 still outstanding. The receivable amount for each month in millions is as follows: July $77; August $44.

The amount owed by the State to the University is nearly double the amount outstanding at this point last year, which was already a historically high level…

$466M on 3/31

State Appropriation RevenueUnrestricted Funds

Billings and Collections through March 31, 2010

$0

$100

$200

$300

$400

$500

$600

$700

$800

$45.5

$45.5

Collected Billed Appropriation Rescission Stimulus

In Millions

$397

$712

$724

$19$743

$210

$671$697.5

$45.5$743

2009 2010

FY09 appropriation includes $19 million rescission.FY10 appropriation includes $45.5 million of federal stimulus funding and assumes restoration of FY09 rescission.

2008

$665

$707

$722

$722$717

$315

$464

$253

Potential Solutions to the State Budget Hole(in Millions of Dollars)

Proposals Impact

Various budget cuts (on $29.6B base; roll back spending to FY 2007 levels) $2,100

Increase employee contribution to retirement and health insurance plans $400

Increase personal income tax rates (from 3% to 5%) $5,700

Increase corporate income tax rates (from 4.8% to 6.4%) $300

Tax retirement income (repeal exemption) $1,600

Various other tax adjustments (rate increases, repeal credits & exemptions)

$500

Defer to FY 2012/borrow/hope for economic recovery or additional Federal stimulus/additional drastic budget cuts

$2,100

Source: Civic Federation report, “A Fiscal Rehabilitation Plan for the State of Illinois”

$12.7B

UIC’s price is high relative to the Big 10 public universities…

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Undergraduate Tuition and Mandatory FeesBig Ten Public Universities- FY 2010

Average, excl UIC & UIUC

…though not when compared to the local competition.

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Undergraduate Tuition and Mandatory FeesSelected Chicago Area Universities - FY 2010

Average, excl UIC

We allow admissible Pell-eligible students to attend UIC even though they cannot afford our tuition and fee increases. Maintaining access to excellence requires a commitment to institutional aid.

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

University of Illinois Financial Aid Expenseas % of tuition revenue

UIC

UIUC

UIS

UIC returns more tuition revenue to students in financial aid than its sister campuses

More than half of the full-time undergraduate students pay less than the full sticker price, and more than a third pay nothing.

ChicagoUrbana-Champaign

Based on Fall 2008 Full-time Undergraduates.

Springfield

14%

9%

23%

54%

36%

7%12%

45%32%

19%17%

32%

$0

$1 - $1,999

$2,000 – Less than Full Tuition

Full Tuition & FeesStudents Who Pay

University of Illinois – Fall 2008

Big Ten University and Foundation EndowmentsFY 2008

(Dollars in Billions)

$7.6$7.2

$2.8

$2.1 $2.1 $1.7 $1.5 $1.5

$1.3

$1.3$0.9

$0.19

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

Source: NACUBO Endowment Study FY 2008.

U of I Capital AppropriationsFY 1995 to FY 2009

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Repair & Renovation Regular Capital Designated Projects UIC ACT - Funding not released

$21.1

$80.7

$30.5

$0.0

$27.8

$46.8

$172.3

$197.7

$12.7

$41.8

$0.0$0.0 $0.0 $0.0 $0.0

(Dollars in Millions)

FY 2010 State Capital BudgetMajor Projects as Signed by the Governor

(Dollars in Thousands)

Page 18

Project TotalUniversity Wide Repair and Renovation $32,205

Urbana Lincoln Hall Remodeling 57,304Chicago College of Medicine Rockford1 14,820Urbana Petascale Facility 60,000Urbana Electrical and Computer Engineering Bldg.1 44,520Urbana Integrated Bioprocessing & Research Lab 20,034Chicago Dentistry Modernization/Code Compliance 20,800

Springfield Public Safety Building 4,000

1State match on non-state funds.

UIC Budget ForecastFY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Better 0.0% 3.0% 3.0% 3.0% 3.0%Middle 0.0% 0.0% 0.0% 0.0% 0.0%Worse (15.0%) (10.0%) 0.0% 0.0% 0.0%Better 9.5% 5.0% 5.0% 5.0% 5.0%Middle 9.5% 5.0% 5.0% 5.0% 5.0%Worse 9.5% 9.5% 5.0% 5.0% 5.0%Better 0.0% 2.5% 2.5% 2.5% 2.5%Middle 0.0% 2.5% 2.5% 2.5% 2.5%Worse 0.0% 0.0% 2.5% 2.5% 2.5%

Utilities 0.0% 5.0% 5.0% 5.0% 5.0%Financial Aid (as % of UG Tuition) 15.0% 15.0% 15.0% 15.0% 15.0%

Tuition (Base)

Salary Program

GRF from State

UIC Budget Forecast – 3 Scenarios

($40,000)

($30,000)

($20,000)

($10,000)

$0

$10,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Net Funds Available

Better Scenario Middle Scenario Worse Scenario

Personnel StrategiesFurloughs (or Voluntary Pay Reductions)

• 4 or 10 day• Exceptions – clinical AP, revenue generating, visa, <$30K• SURS implications

Hiring Freeze: Exceptions?

• Phase I (Before Budget Plans Approved): Chancellor and Provost approvalFor business continuity, revenue generating, critical leadership role

• Phase II (After Budget Plans Approved): Dean or Vice Chancellor approval

• Some delegated approvals effective Immediately: • Medical Center & clinic staff – approval by CEO of Medical Center or Dean• 100% non-state funded positions – approval by Dean or Vice Chancellor• Temporary positions: approval by Dean or Vice Chancellor

Retirement agreements – same terms as always (vs. UIUC program)

Non-reappointments. Position elimination.

Review ProcessRethinking How We Do Things

UIUC“Stewarding Excellence”

UNIVERSITYAdministrative Review and Restructuring Group

Records and Info Management Services Task Force

UICUIC Academic Directions Task Force

Administrative Review and Restructuring (Internal)Administrative Review and Restructuring (External)

Task Force on IT at UICUIC Records Management Task ForceCollege

Planning

UAAdministrative Review and Restructuring Group

Charge (by S. Ikenberry): Report due May, 2010

“rationalize the organization, improve performance and reduce costs of administration”

“review and make recommendations to me to improve the effectiveness and efficiency of our administrative organization and services…”

Subcommittees:• Communications • IT• Procurement• Service Centers• HR• Regulatory Relief• Facilities/Capital Programs/Auxiliaries

Craig BazzaniFormer VP for Administration

Chair:

UIC Review of Administrative and Academic Units

UIC Academic Directions Task Force

Administrative Review and Restructuring (Internal)

Administrative Review and Restructuring (External)

Task Force on IT at UIC

UIC Records Management Task Force

UIC Academic Directions Task Force

Phase I report: Sept. 1, 2010 Phase II report: Dec. 31, 2010

CHARGE

Examine intellectual and competitive strengths of units and programs supporting UIC’s academic mission including institutes, centers, support programs, and college programs.

Inform the campus of academic areas for new investment or to shelter from adversity.

Examine the impact of unit/program relative to peers, the mission and vision of UIC, and cost.

Examine each unit/program in the context of the other units with which it interacts and the synergies created.

Determine if the activity is essential to UIC’s mission, and whether it adds unique strength to UIC.

Consider whether new units should be created to anticipate key academic needs, or whether existing activities could be better (re)organized.

Lon KaufmanVice Provost for

Planning & Programs

Robin MermelsteinDirector, IHRP

Professor of Psychology

Co-chairs:

UIC Admin. Review and Restructuring (Internal)

Prelim. report: June 1, 2010 Final report: Dec. 31, 2010

CHARGE

Areas covered: Energy Procurement and Consumption, Facilities and Services, Business and Finance, Human Resources, Capital Programs, Auxiliary Operations, Purchasing, Research Administration.

Identify important functions of the units and how each supports the mission of UIC.

Determine whether the functions are necessary; can be redesigned and simplified; or can be eliminated altogether, and with what consequences.

Examine cost of the function relative impact, and whether the unit has ways for gathering feedback and assessing and improving performance.

Consider at what level (university, college, campus, outsource, etc.) the processes should be carried out.

Consider how to improve the interface between campus and central administration functions.

Peter NelsonDean, Engineering

Creasie Finney HairstonDean, Jane Addams College of

Social Work

Co-chairs:

Prelim. report: June 1, 2010 Final report: Dec. 31, 2010

CHARGE

Areas covered: Communications/Public Relations, Development, Alumni and Corporate Relations, Governmental Relations, Economic Development, Extension.

Identify important functions of the units and how each supports the mission of UIC.

Determine whether the functions are necessary; can be redesigned and simplified; or can be eliminated altogether, and with what consequences.

Examine cost of the function relative impact, and whether the unit has ways for gathering feedback and assessing and improving performance.

Consider at what level (university, college, campus, outsource, etc.) the processes should be carried out.

Consider how to improve the interface between campus and central administration functions.

UIC Admin. Review and Restructuring (External)Penelepe Hunt

Vice Chancellor, DevelopmentClark Hulse

Associate ChancellorProf. of English & Art History

Co-chairs:

Task Force on Information Technology at UIC

Prelim. report: June 15, 2010 Final report: Sept. 30, 2010CHARGE

Relate UIC’s strategic goals to their IT requirements.

Recommend IT governance practices that allow senior leadership to set priorities and align IT efforts with campus goals, without excessive management at a technical level.

Recommend ways to increase the transparency of the governance process.

Recommend changes in organizational responsibilities that would improve IT services. Consider both centralized and. distributed service models.

Recommend adaptive funding mechanisms and appropriate funding/resource levels.

Recommend funding models sufficient for high-priority needs that incentivize good behavior.

Henri GilletInterim Dean, Grad. CollegeProfessor of Mathematics

Chair:

UIC Records Management Task Force

Draft report: May 15, 2010 Final report: Sept. 30, 2010

CHARGE

Draft a campus policy on the management of analog and electronic records ensuring compliance with public records laws and to ensure preservation of valuable records.

Develop a draft policy on addressing e-mail records management.

Develop a plan for the timely creation of record retention schedules in collaboration with UIUC.

Recommend a process for educating units on records management policy and practice.

Recommend structure and staffing of a Records Management Program at UIC.

Serve as a liaison to the Records and Information Management initiatives at the University Administration level and relevant UIC task forces.

Mary CaseUniversity Librarian

Chair:

Diversity Strategic Thinking and Planning

http://www.uic.edu/depts/oaa/diversity_planning/

Campus committee: 28 people (representing colleges, library, other units)

Co-chairs: Lon Kaufman, Vice Provost for Planning and ProgramsWilliam Walden, Special Assistant to the Provost for Diversity

Phases: Diversity strategic Thinking: Through the Lens of Diversity (draft available)Diversity Strategic Planning (expected completion January 2011)

Goals: Institutional transformationIncrease participation and success of underrepresented groupsIncorporate diversity into every aspect of institutional lifeRealize the full benefits of our diversity -- enrich education, research, etc.

Importance of engaging entire campus: Town Hall Meeting April 21, 2:00, SSBcampus committee working with college and unit committeesextensive constituency meetings completed